By Nilanjana Basu and Aishwarya Nair

(Reuters) – U.S. travel agencies are investing heavily in marketing as they seek to capitalize on a summer tourism boom following the pandemic.

Following being one of the largest victims of the healthcare crisis, Airbnb Inc and Booking Holdings (NASDAQ) Inc. Expedia Group Inc. (NASDAQ:) Tripadvisor Inc has seen unprecedented demand from Americans suffering from the pandemic.

The U.S. Travel Association has released monthly data that shows about six of 10 Americans are planning to go on at least one summer vacation this year.

Richard Clarke, a Bernstein analyst, said that this could be the most exciting summer for travel and that no one would wish to miss it.

According to Insider Intelligence market research, 14.2% or approximately $4 billion of the U.S. travel sector’s marketing budget will be spent on digital advertising in 2018.

The short-term impact of the increase in spending will be a loss in profit, but the benefits may outweigh the costs over the next few years as the demand for travel is set to rise.

GRAPHIC: Revenue set to jump from travel demand https://graphics.reuters.com/USA-TRAVEL/SUMMER/gkplgkrgavb/chart.png

Bookings are being booked at premium rates by customers. “There have been a lot savings over the past two-years… so even with inflation there are enough customers who will pay more just to travel,” HotelPlanner chief executive Tim Hentschel said to Reuters.

Adobe’s Digital Economy Index reported that March was 15% more expensive than usual for U.S. domestic flights. But, the rise in ticket prices has not reduced demand. This suggests that Americans may be ignoring the rising inflation impact at least temporarily.

RIDING A BOOM

To attract vacationers, travel companies are doing everything possible to improve their sites and offer innovative services.

Airbnb Finance Chief Dave Stephenson stated earlier this month that the company is increasing its marketing dollars, but it will remain relatively constant as a percentage revenue.

The San Francisco-based firm revamped their app and website Wednesday to make it easier for travelers to book vacations in two different properties.

Booking stated that it expected marketing spending in the second quarter of 2009 to make up a smaller percentage than pre-pandemic, while Expedia said its rival Expedia would “spend into (travel) recovery”.

Advertising and marketing costs make up the majority of travel company expenses. They have to find innovative ways to retain customers interested in their products.

Booking’s marketing costs accounted approximately 46% for its total operating expense in the first quarter. Expedia’s selling, marketing and other expenses represented nearly 60%.

GRAPHIC: Soaring expenses https://graphics.reuters.com/USA-TRAVEL/SUMMER/lbvgnykbjpq/chart.png

David Goulden (Booking Chief Financial Officer) stated that there was a unique opportunity this year to leverage marketing and merchandising in an ailing travel market.